For many years our state and local governments have been looking for ways to save money in their budgets. Some have turned to privatization as a way to reduce cost. Privatization ultimately ends up costing taxpayers more money in the long run no matter how much they save up front. The private prison industry is no different.

Private prisons have been popping up all across the country. They offer to build a new prison and then lease it back to the state. Also part of this agreement is that the state will pay the private prison company to operate the prison.

The initial savings come from the fact that the private prison company coughs up some of the money to cover the cost of constructing a new building. Many state’s budgets are so thin that they cannot afford to do major investments like building a new prison. This may save the taxpayers money in the actual construction, but the private prison industry makes their money back and more on the occupancy of the prison.

The study documents the shocking prevalence of contract language between private prison companies and state and local governments that either guarantees prison occupancy rates (“lockup quotas”) or forces taxpayers to pay for empty beds if the prison population falls due to lower crime rates or other factors (“low-crime taxes”).

That’s right, you are paying a corporation for empty beds in private prisons.

Nationally we all have been working to reduce the number of prisoners in our penal system. Reducing the number of inmates would also help reduce our state budgets, right? Wrong. With ‘Lockup Quotas’ it does not matter how many people are in the prison, the corporation still gets a minimum fee.

In The Public Interest, who released the above report, found “nearly two-thirds (65 percent) include occupancy guarantees and force taxpayers to pay for empty prison beds if the lockup quota is not met.”

ITPI research also found that “lockup quotas in private prison contracts range between 80 percent and 100 percent; 90 percent is the most frequent occupancy guarantee requirement. Arizona, Louisiana, Oklahoma and Virginia have the highest occupancy guarantee requirements, with quotas requiring between 95 percent and 100 percent occupancy.”

Image from ITPI Report

Donald Cohen, Executive Director of ITPI stated: “Private prison companies are gaming the system to guarantee themselves profits at the expense of taxpayers and, worst of all, at the expense of people’s freedom. Governments should cease working with this corrupt industry and reclaim public control of corrections.”

Alex Friedmann, Managing Editor of Prison Legal News, a project of the Human Rights Defense Center stated: “As a private prison expert who began researching the industry while incarcerated in a for-profit prison, I can tell you firsthand that private prison companies are profitable only because they are ethically bankrupt, with taxpayers footing the bill.”

The story does about the private prison industry does not stop there. One of the largest private prison corporations, Corrections Corporation of America (CCA), uses inmates as slave labor. Forcing inmates to work for as low as $.50 an hour.

Arizona inmates working for private agricultural companies are paid a “whopping fee” of “more than 50 cents an hour.” Read “How US prison labour pads corporate profits at taxpayers’ expense” in The Guardianhere.

Liz Iacobucci talked about these atrocities before in the NH Labor News post, “Another thing that went wrong in the Bush Economy.” That post describes how inmates in Arizona are forced to work for $2.00 an hour while CCA takes 30% to offset their incarceration costs and the state takes another 30% for legal costs. That means inmates are being forced to work for about $.80 cents and hour. Do you think that CCA gives that 30% back to the state to reduce the taxpayer cost of incarceration?

What do you do with an entire prison full of slave labor; you sell it to the highest bidder. During the G.W. Bush administration the Department of Justice teamed up with the National Corrections Industry Association to promote this idea. They even produced a recruitment video (circa 2004) to draw manufactures to set up shop in the prisons.

“I asked an NCIA spokesperson how private companies can get away with what could reasonably be described as forced labor. He explained that the PIE program classifies certain work functions as a ‘service’ rather than an actual ‘job’, and therefore is not subject to [restrictions in a 1979 federal law]. Conveniently, then, the backbreaking work of picking crops in the blistering sun counts as a ‘service’, so prisoners can be paid even less than the immigrants who have traditionally performed this work.”

The private prison industry is very lucrative for those at the top. CCA brought in $178 million in 2012 and GEO brought in $78 million. Over 40% of CCA’s total revenue comes from federal contracts. That is your tax dollars lining the pockets of these companies.

It is obvious to see that the private prison industry is a loss for taxpayers. We are overpaying for services with ‘lockup quotas’, while they collect massive profits from slave labor camps inside the prisons.

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About Matt Murray

Matt Murray is the creator and an author on the NH Labor News. He is a union member and advocate for labor and progressive politics. He also works with other unions and members to help spread our message. Follow him on Twitter @NHLabor_News

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